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Exclusion Confusion

The issue of whether an excluded driver, by virtue of having executed a standard OPCF-28A excluded driver form, is legally also considered to be “any person specified in the policy as a driver of the insured automobile” for the purpose of statutory accident benefits coverage has plagued insurers and lead to numerous priority disputes with little consensus amongst insurers, lawyers or private arbitrators in the industry.

Insurers were provided some guidance when, in early 2016, Justice Wright released her judgment in Dominion of Canada General Insurance Company v. State Farm Mutual Automobile Insurance Company (Unreported, October 2015). According to Justice Wright, the claimant, who was an excluded driver upon his parents’ policy, was “clearly not a driver of an insured automobile and thereby not entitled to coverage”. Justice Wright overturned the underlying award of Arbitrator Bialkowski and created the short-lived precedent that an excluded driver is not equivalent to a “person specified in the policy as a driver of the insured automobile” for the purpose of accident benefits coverage.

However, in the recent judgment of Belairdirect Insurance v. Dominion of Canada General Insurance Company (2017 ONSC 367, January 2017) Justice Akbarali agreed with the analysis of Arbitrator Cooper in his underlying award. Arbitrator Cooper had performed an analysis and concluded that an excluded driver was a “person specified in the policy as a driver of the insured automobile” (or a “listed” driver), which would otherwise have supported Belair’s position. However, he went on to state that he was bound by Justice Wright’s decision and, therefore, found for Dominion. Justice Akbarali stated that she was not so bound. She went on to agree with Arbitrator Cooper’s analysis and stated that an excluded driver was, in fact, an “insured person” and also a “listed driver” for the purpose of accident benefits coverage.

One of the major differences between the ratios of the two Judges appears to be the standard of review applied. Justice Wright applied a standard of correctness, whereas Justice Akbarali applied a standard of reasonableness, further to a decision rendered by the Court of Appeal in the intervening period, namely Intact Insurance Company v. Allstate Insurance Company of Canada (2016 ONCA 609, August 2016).

The judgment of Justice Wright is in the process of being appealed to the Court of Appeal, with a hearing date scheduled in March 2017. Therefore, it is expected that the Court of Appeal will shortly provide the industry with much needed guidance in this area and dispel the current state of confusion.